Why Might Short Sales Stabilize the Real Estate Market?

January 30, 2012

I hear from lots of prospective buyers that want to get a list of Tehachapi foreclosed properties so they can look for the “best deal.” The truth is a foreclosed property may not be the best deal whether you are the occupant of the foreclosed home, or the prospective purchaser.

As the occupant, if you are just waiting for the foreclosure to go through, you’re not really doing yourself, or your neighbors, any service at all. I understand that the entire situation is distressing and stressful. You probably already went through one or more attempts at a loan modification. I’m sure you’ve had plenty of offers of “help” that didn’t seem very helpful. Regardless of what your history has been, it’s pretty much never a good idea to stand by and let the lender foreclose.

As the seller, you can salvage the shreds of your credit rating by taking action. In addition to stopping the free-fall on your credit rating, you’ll be able to hold your head up and move on with your life. How do you do that? Consider a short sale as an alternative to passively waiting for foreclosure.

Why is this good for your neighbors? A foreclosed home typically sits vacant for extended periods of time while the lender is readying it for sale. During that time, squatters may move in, but whether they do or not, the property continues to deteriorate while it sits there waiting. This means that the value is going down while it sits too. This spiral is contributing to the issues we face today with market values dropping because when these distressed properties finally do sell, they are the comps (comparable properties) that are being used to help value the properties for which buyers are getting loans.

Foreclosed properties typically will sell for a little bit less than non-foreclosures, but those savings come at a cost. The costs can include both time and money. A foreclosed property will, most often, need some work done in order to bring it up to the standard of a non-foreclosed property. That means that it may not be the best deal when it comes to buying.

It also takes a special kind of person to look past the problems and see the beauty that can be revealed with some sweat equity.

It takes an even more special seller to take action and try to sell the house before the lender forecloses. If you are that kind of seller, I’d be happy to talk to you about options. Why not call today?